Death and Taxes!

With tax season upon us, we need to think “tax incentives”, “tax credits” and legal “tax write-offs”!!!  These tips are relevent whether you live in Portland, Oregon or elsewhere in the US!  Of course, first and foremost in my mind is the $8,000 First-Time Home Buyer Tax credit (not deduction)!  It was originally set to expire on November 30th, 2009 but this credit of up to 10% of the purchase price or up to $8,000 was extended into 2010 (purchase agreements must be signed by April 30, 2010 and closings must be final by June 30th, 2010)!  The new program was also expanded to include a tax credit of up to $6,500 (or up to 10% of the purchase price…not to exceed $800,000) for qualified buyer of a ”repeat” or “replacement” home under the same deadlines.  To qualify, home purchasers must have owned and occupied a primary residence for five consecutive years during the last eight years.  Most importantly, the new program significantly increased previous income requirements. 

There is also a property-tax deduction for non-itemizers.  You don’t have to be a new homeowner in 2009 to deduct qualifying property taxes, but prior to 2008, you did have to itemize your taxes in order to receive the benefit–not anymore.  Under the new rule, homeowners who don’t itemize can boost their standard-deduction amount by up to $500 if they’re single and up to $1,000 if they’re married and file a joint return to account for property taxes paid during 2009.  You’ll need to include a Schedule L with your 2009 tax return, but it’s definitely worth it if your qualify.

If you paid refinancing points, you get to deduct the points over the life of the loan.  That means you can deduct 1/30th of the points per year if it’s a 30-year mortgage.  It’s not a lot of savings, but everything helps when you’re legally trying to lower your tax bill.

There are multiple energy and home improvement credits.  Homeowners can make energy-conscious purchases that will provide tax benefits when filling out their tax returns for 2009.  The new law provides tax credit for making your principal residence more energy efficient and for buying certain energy efficient items.  There is the Residential Energy Property Credit and this new law increases the energy tax credit to 30% of the cost of all qualifying energy-efficient improvements to existing homes.  This includes windows, doors, insulation, water heaters, energy-efficient heating and air conditioning systems, roofs, biomass stoves.  And, there are no income limits and no AMT (Alternate Minimum Tax) ramifications. It also raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.  Go to http://www.energystar.gov for loads more information!

There are a few other tax breaks such as new car purchases.  If you bought a qualifying new car or truck ($49,500 or less) between February 16 and December 31, 2009, you may be able to deduct the sales or excise tax (for state of Washington buyers).  Your income must be less than $125,000 for a single taxpayer or $250,000 for a couple to get the full deduction.  The benefit applies to more than one vehicle, as long as all of them qualify and delivery was taken by December 31st.

Unemployment benefits are usually fully taxable.  If you received any unemployment benefits at any time during 2009, you are eligible to exclude the first $2,400 of these benefits when you file your tax return.  For a married couple, the exclusion applies to each spouse separately.

If you were unemployed in 2009 but you got a new job, moving expenses may be deductible, if you moved more than 50 miles away and you don’t have to itemize to get this deduction.  For 2009, you can deduct the cost of getting yourself and your household goods to the a new area 50+ miles away, this includes 24 cents per mile for driving your own vehicle, plus parking fees and tolls.

Don’t forget the Private Mortgage Insurance (PMI) tax deduction!  If you put down less than 20% on a house, you were required to purchase private morgage insurance, which protects the lender in the event you default on the home loan.  Starting with loans issued or refinanced in 2007, and continuing through 2010, you can deduct each year’s premiums paid on PMI for your principal residence and for a non-rental second home.  The tax break was originally good for 2007 only, but the government extended it for three years.  The deduction begins to phase out once your adjusted gross income (AGI) reaches $100,000 ($50,000 for married filing separately) and disappears entirely at an AGI of $109,000 ($54,000 for married filing separately).

There is also a Residential Energy-Efficient Property Credit witch covers very expensive but green products such as solar electric, solar water heaters, geo-thermal heat pump, wind energy and full-cell power plants with a 30% credit for qualifying costs.  With all of these credits, financing is permitted!  Again, go to http://www.energystar.gov for specifics and, of course, always consult with your tax professional!!!

Ted C. Jones Brings Strong Opinions/Humor to Portland Oregon Economic Forecast!

Ted C. Jones, Chief Economist for Stewart Title

•   ”and, I think it’s gonna be alright,
• yes, the worst is over now.
• The morning sun is shining like a red rubber ball”. 

The Cyrkle/1966  http://www.youtube.com/watch?v=hOxLaHPPzzw

  Ted C. Jones, Ph.D.
Senior Vice President-Chief Economist, Stewart Title Guaranty Company
Director of Investor Relations, Stewart Information Services Corporation NYSE-STC  gave a robust presentation today, Thursday February 25th, 2010 at the Columbia Yacht Club to a room full of Real Estate Brokers, Mortgage Brokers and Title reps hungry for information and tidbits of foresight on economic predictions for Portland, Oregon.  There were no “defining moments” or “jarring revelations” at this seminar, but lots of good facts, figures, opinions and observations!  His real estate and economic predictions (which he reminded us were just about “spot on” last year, except concerning interest rates) simply concurred with a lot of other reading and presentations I have attended.  However, he made the material interesting, palatable and interspersed what he called “Ted’s Solutions” to a myriad of problems.  You don’t have to agree with everything but he certainly backed up his opinions and prophecies with a lot of graphs and historical data.   

• Wall Street:  liquidity and Washington realizing that they can’t contol
• Jobs:  he feels the stimulus is not working
• Time-Bomb loans:  now concerned about commercial
• Terrorists attacks
• Pandemic:  like Bird Flu
• Inflation and cap rates going up
• Tax-cuts
• Energy:  US imports 63% of oil
• All the band-aid fixes for real estate, autos, credit cards and banks

Just as a regular citizen trying to reign in a budget and make their finances work, the US must start with decreased spending.  He definitely believes (as do most in the industry) that interest rates are artificially low and will definitely begin to creep up.  He believes we will not see interest rates as low as we are now experiencing in our lifetime again (I guess it matters how old you are).  Those buyers with good credit or cash, a bit of patience and some luck will make some great buys in the existing market.  And, he feels our next crisis will be in the commercial real estate market.  “History doesn’t repeat itself, but it certainly does rhyme!”….Mark Twain.

“Sunshine on My Shoulder Makes Me Happy!!”**

Though I was never particularly a huge fan of John Denver’s**,every time an unexpected burst of sunshine visits Portland Oregon, I can’t help but start humming “sunshine on my shoulder makes me happy”!!!  This photo was taken yesterday (the first of two days of wall-to-wall sunshine in Pdx) of Tanner Springs Park in the Pearl District of downtown.  The sunny weather brings out a sunny disposition in Portlanders, as even as there is a chill in the air, folks are enjoying the parks, sitting in the sun and jumping on their bikes.  If we weren’t “true Oregonians” (and transplants count), we’d be stowing our down vests and coats and whipping out the shorts and flip-flops.  However, we know better!  We are experiencing a “teaser”.  All the same, this a commonly known secret (amongst Oregonians) regarding Portland and Oregon area weather, it doesn’t really rain ALL the time!!!  But, if the secret got out, we’d look like the endless city-upon-city/freeway-upon-freeway that has been visited on SoCal or even the Bay Area.  The reason that Portland continues to be  a destination for people/families on the move searching for quality of life is: “THE QUALITY OF LIFE”!  We have a void that we have filled in the USA where we embrace “Keep Portland Weird”, see Kink.fm’s take on that ( http://www.kink.fm/Keeping-Portland-Weird-makes-sense/6400344 ), while we entertain arts and culture at every level and have plenty of venues for a very elegant lifestyle ( http://www.pcs.org/) ( http://www.obt.org/) ( http://www.portlandopera.org/ ) and SOOOOOO much more!  We have this undercurrent of fabulous restaurants that “foodies” embrace with a vengeance and that “word” travels see how Portland is nominated for Budget Travel magazine’s “Best Food City in America” ( http://budurl.com/z6×7 )!  We have this superb Tango culture (that I just recently discovered) and our city hosted the equivalent to the “Tango Olympics”, by the way ( http://www.claysdancestudio.com/tangofest/index.shtml) !!  We have this bicycle friendly, ever-developing national presence. Go see the Portland Bicycle Plan for 2030 ( http://bit.ly/2030PortlandBikePlan ) . Or, see how Portland ranks #2 in an airport satisfaction survey ( http://bit.ly/dlAQ1t ).  Anyway, we are constantly hitting the national and international scene for our exhuberance (on so many issues, on so many levels). You don’t have to agree or disagree, I just see it as positive for giving Portland the opportunity to be “all that it can be”! It’s NOT the end of the story.  My father, Joe B Jackson, was involved in my hometown city government (including being Mayor) of Murfreesboro, Tennessee for so many years (I can’t actually come up with an accurate number…however, maybe more than 30???) so now I beginning to understand his passion for a place he finally found to call home.  I have that passion for Portland!!!!

The Evolving Role of the Real Estate Broker!

The role of the real estate agent in Portland Oregon or anywhere else is constantly evolving.  When I started my real estate career in 1985, we had one computer in our office.  NO ONE in my office had a personal computer.  I knew one Realtor with a cell phone (that was about the size of a State Fair prize-winning zucchini) and it was so expensive the agent was afraid to make calls!  No one had ever “faxed” an offer to someone (much less e-mailed one).  I still remember beating out another offer because I “faxed” an offer to a client in the mid-west for his signature (while the other agent overnight-ed their packet).  I had to work-out on a regular basis because my “Multiple Listing Book” was larger and heavier than a Manhattan phone book (and, that was really the only way to access the listing inventory).  Of course, the book was always two weeks behind the inventory due to publishing and printing constraints.  A secretary “manned” (or, more likely, “womaned”) the front desk and was your lifeline to communication with clients and potential clients, where you maybe checked in twice a day by stopping by or calling from a pay phone while “out in the field”.  Real estate offices did eventually “morph” and provided 2-3 computers in a work room for all the agents in the office to share (I was in an office with 75 agents and 3 computers at one time).  Since in today’s world way over 50% of our business is transacted through working on our web sites, blogging, e-mailing, e-faxing and connecting while in the field from our “Smart Phones”, I don’t know why there weren’t more shootings in real estate offices as agents vied for time on the computers!!! If I hadn’t lived it myself, I would think this was a figment of someone’s imagination….really good “fiction” about the way things were.  And, NO……those were not the “good ‘ol days”……not for me anyway!

Anyway, I digress.  To survive in the real estate business you must constantly reflect your buyer’s and seller’s needs and the requirements of the marketplace in present tense.  Real estate information is no longer proprietary and we are not the “gate-keepers” of listing inventory or property details.  Home buyers and sellers have access to multiple sources of information and with 90% of buyers starting their real estate search on the web and xx% of sellers researching their position online, the public does not need real estate agents as their first point of contact.  There are a myriad of ways to access much of that data.  Our industry must keep re-structuring and re-inventing itself to reflect the times.  We need to “kick it up a notch” and be a partner in an important set of decisions that revolve around a real estate purchase.  We must be a source for other referrals such as mortgage brokers, title and escrow companies and property inspectors.  We must be an educated and experienced resource.  We have to be a strategist, a fellow brain-stormer, an advocate and a sponge (take it all in, wring out what we don’t need).  We have to not chase the immediate sale, but rather embracethe long-term relationship.  We have to negotiate with a win-win attitude while solidly championing our clients’ position.  We absolutely have to maintain a certain level of technical proficiency and constantly be willing to upgrade our technology….it is a “people-first business”, but you must have access to fast information and an even faster response time!  We have to read, take classes, attend seminars/webinars and scour real estate, financial and economic “rags” to keep abreast of the “latest and greatest”.  We have to respect ourselves and our clients by first investing in ourselves, personally and professionally.  You cannot be an advocate if you’re not mentally, physically and spiritually at least trying to be at the “top of your own game”!

The emergence of this new breed of real estate agent will, of course, begin with the on-going edification of existing professionals.  The rest of the evolution of the industry will have to launch with hiring practices.  Instead of pressure on managing Brokers in real estate offices to “fill seats” or simply produce “warm bodies”; instead of a “numbers game” the industry will have to embrace the age-old “quality over quantity” ideology!  The public will have to insist on “full-time” vs “part-time” agents to represent them.  Why does this matter?  It matters because experience matters!  Everyone has to start somewhere, so why not institute “mentoring programs” within real estate offices, where new agents can actually shadow experienced agents and learn the basics.  Instead of fueling a state of paranoia, the agents develop a sense of community and camaraderie.  Of course, a little old fashioned competition mixed in doesn’t hurt, but sharing the wealth of knowledge is essential.  Lack of training is rampant and handing someone an RMLS-web code, a desk and a phone is not enough to secure the success of that agent or the clients they represent!

I am one of the lucky ones.  Not only do I love my job (despite the fact that 2008/2009 tested my stamina), but I started my career in another down market with interest rates at 13% and a stampede of real estate agents had left the business.  There were only 12 agents in my office and we were given individual attention and weekly required classes.  I know that many newer agents have never seen a downturn…till now.  This temporary down market could give managing Brokers the opportunity and time to really participate in their agents’ development.  Instead of setting the bar so low, we can now demand from ourselves our very “highest and best”.  Just some thoughts……………

IF You Are Thinking of Buying Portland Real Estate…Why Buying Now Will Save You $$$!!!

Portland Oregon Real Estate Update!  Homeownership doesn’t always make sense and so you need evaluate if the time is right for making that new purchase, moving up or moving down or procuring an investment property.  However, as my Father used to say there’s never a “perfect time” to “buy a home”, “get married” or “have children”, but if you’ve decided it’s something you desire you just need to make it happen (with the proper due diligence, of course)!  Here are some factors that could and should impact your decision!!  Most everyone is probably aware by now of the first-time buyer tax credit (go to http://bit.ly/Original1stTimeBuyerCredit  for more information).  And, you’ve probably heard about the repeat or existing homebuyer tax credit (go to http://bit.ly/RepeatBuyerTaxCredit for more details).  Both of these incentives end April 30th, 2010.  But, there are other factors in play behind the scenes right now.  The Federal Reserve Bank of New York has been the buying up “mortgage-Backed-Securities” (MBS) on the Bond Market since November 2008 (and have been the single largest buyer).  This is where interest rates are determined.  Investors buy MBS securities as investments.  The larger the demand, the lower interest rates need to be.  If demand falls, then interest rates will need to rise to make the MBS more attractive to investors.  Part of the stimulus bill included the Federal Reserve’s purchase of over $1trillion in MBS and this has kept rates very low.  This program was scheduled to end December 31st, 2009 but has been extended through March 31st, 2010!  Many experts predict that interest rates will begin to rise then.

So, are you following me so far?  We have the impending end of the tax credit, the possibility of interest rates rising, lots of existing inventory and low pricing.  Most of the tricky, sticky, weird and wild loans are gone but other mortgage issues could have a negative impact on buyers relying on FHA (Federal Housing Authority) insured loans.  The FHA upfront mortgage insurance (MI) premium is going from 1.75% to 2.25% of the base loan amount on April 1st, 2010.  For example, on a $275,000 purchase price with an FHA loan, the down payment would be $9,625 with a base loan amount of $265,375:

Before April: Upfront MI FHA =$4,644 (1.75%), Tax Credit=$8000

After April:  upfront MI FHA=$5,971 (2.25%), Tax Credit=0

Many people rely on FHA secured financing because they are more forgiving on credit scores and homeowners can have a higher loan-to-value ratio (less money required for a downpayment). 

Forbes.com recently has an article on the Top Ten cities where it was a good time to make the jump to homeownership because of increasing rents (and Portland Oregon made the list) (go to http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes.html  and http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes_slide_11.html to read more).  And, if you’d like to explore a good rent-vs-buy calculator go to http://www.gonorthwestloans.com/mortgageLoanCalc.html

If you have decided that a new home is in your future, let’s make it happen!!!

What’s the Buzz…Tell me what’s a-happening (in Portland Oregon real estate)!!??

“What’s the buzz…tell me what’s-a-happening….what’s the buzz…tell me what’s-a-happening”.  I certainly don’t have a crystal ball, but sure could use one these days!  Perhaps on Craig’s List??? I’m doing a lot of market analyses of Portland properties lately to determine an appropriate possible sales price.  It’s not easy in a market where foreclosures and short sales undercut and undermine the market stats (and expect more of those this year).  It’s often difficult to define that “sweet spot” in the market where you don’t leave money on the table but still entice buyers to offer!  There ARE buyers and there ARE properties selling IF they appear to be a “steal or a deal”.  It is still very much a buyer’s market with the possible exception of well-placed, well-staged and well-priced homes at the first-time buyer price point.  At that entry price point (which is looking oh so much more attractive and accessible than it was a couple of years ago), I have run into some multiple offer situations.  Other higher price points do also move but with much more consideration and due diligence.  The move-up/repeat buyer market moves more slowly and it’s all about price!  The more money at stake, the more enticing the price must be.  With inventory as high as it is, you must consider pricing your home to sell as a competitive sport!  You must out-shine and under-cut the available competition. 

Are the first-time home buyer tax credit and repeat home buyer tax credits helping our real estate marketplace?  I definitely believe that the credits are an incentive.  But, no one should buy a house merely for a tax credit.  However, if a new home was a goal I would most certainly be amenable to “free money” from the government!  I guess if I were thinking I was ready to make a move, I would be hustling to get my house on the market while that stimulus is still available (buyers must be in contract by April 30th and the transaction closed by June 30th).  I do believe that it’s a good time to buy real estate (and put my $$$ where my mouth is by purchasing a duplex this summer).  Interest rates are very low and there is the potential that rates will rise this year.  I’ve also sold one of my real estate investments this year, so “I feel your pain” regarding how much you may have once thought your property was worth  .  Real estate is still a good addition to any well-rounded portfolio and has always stood the test of time (with “time” being the operative word here).  For some stats on how low interest rates affect housing costs, go to http://fabulousportland.com/2009/04/07/to-buy-or-not-to-buy/ and for a great rent-vs-buy calculator, go to http://www.gonorthwestloans.com/mortgageLoanCalc.html .  Investment real estate is a wonderland of positives in my book.  Someone else pays the mortgage, you get multiple write-offs and depreciation on your taxes, you work towards a positive cash-flow with increasing rents over time and you enjoy appreciation of the value of the property (albeit slow in our current environment). 

So, that brings me to appreciation and what can we expect for our recovery?  See paragraph one as I’m definitely in the market for a crystal ball!  I do read a lot about this subject and attend presentations, I’m “in the trenches” everyday and have worked through multiple real estate market conditions since 1985 (remember interest rates at 13%???).  There are ups and there are downs.  Also, remember if you are buying and selling in the same market you are feeling the pain of selling, but enjoying the benefits of buying.  I do see two unknowns in our immediate future:  unemployment and the commercial real estate market and how they will continue to affect our residential supply and demand.  Otherwise, I believe it will be a slow climb.  It could be five years (give or take) before we see a full recovery.  And, what does “full recovery” mean?  I think our minds will be reluctant to embrace another real estate frenzy anytime soon.  So, a slow and steady plod is a more reasonable expectation.  I’m cautiously optimistic about real estate in 2010!  We are likely to see a slight rebound in sales this year as stabilizing home prices and record-high affordability conditions (along with continued low interest rates) draw buyers into the market.  It’s not as sexy or exciting, but I’d always rather be the turtle than the hare anyway.

1031 Tax-Deferred Property Exchange and Who Wouldn’t Want to Defer Taxes??!!

A 1031 Tax-deferred exchange is a real estate transaction involving the sale of one property with the tax on the capital gain deferred because ofthe qualified purchase of another like-kind property in exchange.  For 1031 exchange purposes, the term like-kind property is interpreted as any type of investment property, rather than property owned for personal use.  The 1031 exchange involves a purchase that must close within 180 days of the sale.  There is also a reverse 1031 exchange in which the sale occurs after the associated purchase.  Investors utilize the 1031 exchange to defer taxes by selling an investment property and using the profits to buy one or more new properties without immediate tax consequences.  Both real and personal property can be exchanged but they are not like-kind to one another.  Almost any property, whether real or personal, which is held for productive use in a trade or business or for investment, may qualify for a tax-deferred treatment under Section 1031.  You can exchange an investment property for any other qualified investment property.  In other words, you have a rental house which now has lots of equity accrued and you would like to sell and purchase two duplexes or sell a duplex and move-up to a small apartment building, etc.  As long as they are “like-kind”, it is allowable.  It’s a great way to continue utilizing both the equity in your investments and other people’s money to acquire wealth through real estate investments.  And, who doesn’t like the idea of deferring taxes?  The tax payer has 45 days from the sale of the original property to identify the new property and 180 days to close.  There are relatively strict rules on the procedures for a qualified tax-deferred exchange, so I use an experienced intermediary to make sure the process is seamless and my tax deferral is protected!  You do not have to use all the funds from the original sale in the exchange.  A tax payer/exchanger can choose to withhold funds or receive other property in an exchange, but it is considered “boot” and will be subject to federal and state taxes.  Anyone owning investment property with a market value greater than its adjusted basis should and could consider a 1031 exchange and I would definitely consult your accountant or CPA!  If you’d like a referral to tax-exchange specialist to further discuss options, please contact me. 

I have noticed that investment properties are “holding their own” in the Portland, Oregon real estate market.  Investors with good credit and/or cash are attempting to locate good rental properties.  Being a landlord is not for everyone but the rewards can be great.  If you think about it, you have someone else paying the mortgage, hopefully a bit of cash flow (and the promise of more over time), plus some appreciation (albeit slow in this market) and the opportunity to set up passive income for the future.  Real estate is also a very tangible investment, as you can drive by…touch and see it.  I love that!!! 

Getting a Loan in a Challenged Lending Market!

Okay….getting a mortgage is definitely not the “loosey-goosey” program it used to be.  You want a home or investment property and are afraid of the looming and blooming credit crunch?  Be not afraid!

• Mortgages are pretty straight-forward.  Not many options, so choices are simpler.  You have 30-year fixed, 15-year fixed, a few ARMs (adjustable rate mortgages) and occasionally another option.  But, the exotic loans of a few years ago are a thing of the past, so less confusion!
• Interest Rates are still VERY Low!  How long will they last?  I certainly don’t know.
• The new Good Faith Estimate guidelines (mostly) protect consumers.  But, the fact is they will protect the consumer from sleasy loan officers.  All fees are disclosed upfront and that amount must stay the same or you will be given up to 7 days to think about it!
• Tax Credit has been extended and EXPANDED!  The tax credit for first time home buyers has been extended till April 30th and the repeat home buyer tax credit has implemented.  See: http://bit.ly/ExpandedBuyerTaxCredit

Change is hard, but the new direction will be good news to the mortgage industry and the consumer!  Appraisers are under a lot of scrutiny, underwriting is a nightmare and if you get a loan you feel like you just got “vetted” for public office!  But, all this new direction in the mortgage and housing industry will ultimately make for a saner housing market…..someday!!!!!

How Bankruptcy Affects Mortgage Loans!

Credit guidelines for mortgage loans are quite fluid these days and continue to change with time.  This information is based on current rules!  The Portland, Oregon housing market has not been hit as hard as some areas of the country but our unemployment remains high.  I see lots of commercial space sitting empty.  Of course, that suggests that “bankruptcy happens” (among other things).

CHAPTER 7 BANKRUPTCY:

FHA FINANCING

HUD requires that a minimum of two years from the date of discharge has passed AND good credit has been re-established.  To get the best interest rate, lenders require a minimum qualifying FICO score of 660 or higher.

CONVENTIONAL FINANCING

The wait period is four years from the discharge date.  To get the best interest rate, you need a minimum qualifying FICO score of 720.

Both loan programs allow an exception to the wait period for cases with extenuating circumstances.  For example,  if the bankruptcy was the result of a job loss, medical bills due to no insurance, disability, etc.  If you qualify for the exception, the wait is one year for FHA and two years for Conventional.

Different rules apply for Chapter 13 AND for consumers who have more than one bankruptcy within seven years.

CHAPTER 13 BANKRUPTCY:

FHA FINANCING

The filing of the Chapter 13 bankruptcy must be approved by the court and the debtor must have been in repayment for at least 12 months.  The repayment history as established by the Chapter 13 must be satisfactory and a credit history must be re-established.  The new mortgage must be approved by the bankruptcy court.

CONVENTIONAL FINANCING

The filing of the Chapter 13 bankruptcy must be approved by the court and the debtor much have been in repayment for at least 24 months.  The payment history must be satisfactory and a credit history re-established.  The new mortgage must be approved by the bankruptcy court.

If the Chapter 13 filing is not approved by the courts (meaning it was dismissed), then the buyer would need to wait four years to obtain a convention loan or two years to obtain an FHA loan!

Profile of Home Buyers and Sellers!

NAR has recently released the 2009 Profile of Home Buyers and Sellers.  The report compiles the results of 9,138 surveys returned by buyers and sellers who sold or puchased a home between July 2008 and June 2009.  The surveys were sent to buyers and sellers based on deed transfers and other public records.  Here are some interesting highlights:

• 47% of all buyers were first time buyers.
• 62% of first time buyers reported that the primary reason for buying a home was the desire to be a homeowner, 35% of all buyers reported that as the number 1 reason.
• The median age of all buyers was 39, same as last year.
• The 2008 median income of buyers was $73,100. The median income of $61,600 among first-time buyers and $88,100 among repeat buyers.
• 83% of all first time buyers are under the age of 44.
• 62% of ALL buyers are under the age of 44.
• 63% of all buyers had not children under the age of 18 residing at home.
• 90% of all buyers used the Internet to search.
• 84% of buyers reported the photos to be the most useful information.
• The number one action taken after viewing a home online was to drive by or visit the home.
• 66% of buyers reported that they used a print ad to search, but between 84% to 90% (depending on the print medium) reported that those sources were “not useful”.
• 36% of buyers found the home they purchased through an agent, 36% found the home they purchased online, less than 3% found the home they purchased in a print ad.
• 78% of buyers purchase their home with an agent.
• 85% of sellers sold their home with an agent.
• 44% of buyers found their agent through a referral from a friend or family member.
• 40% of sellers found their agent through a referral from a friend or family member.
• 10% of buyers purchased a foreclosed property up from 3% in 2008.
• 39% of the mortgages were FHA loans.
• 87% of buyers viewed real estate as a good investment.
• 78% of home buyers purchased a detached single-family home.
• The median sales price of a home was $240,000 in the west.
• 78% of buyers considered commuting costs to be very or somewhat important in their decision.
• The typical home buyer searched for 12 weeks and saw 12 houses.

If you would like a copy of the entire report just let me know and I’d be happy to send you a link!  It’s a great reinforcement for what we have experienced locally in the Portland, Oregon real estate market!!  The internet and a dynamic web presence rules in real estate marketing.  Having as much information as quickly as possible is a definitely plus as more and more younger buyers enter the marketplace and older buyers realize the convenience of internet shopping.  As “smart-phones” continue to be more affordable and accessible, you will most likely see more utilization of instant web flyers sent to phones rather than paper flyers (makes good ecological sense as well).  It’s an exciting time in the world of real estate……stay tuned!!!

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